On 30 October 2023, the FCA published Feedback Statement FS23/7: Long-term asset funds (LTAFs) – Financial services compensation scheme (FSCS) coverage feedback statement.
FS23/7 summarises the feedback received to the FCA’s Policy Statement PS23/7 on LTAFs, which was published in June 2023. In PS23/7, the FCA set out new rules to enable a broader range of retail investors and pension schemes to appropriately assess LTAFs whilst ensuring understanding of the risks involved. In PS23/7, the FCA also asked for views on whether it might be appropriate to remove the FSCS cover for regulated activities relating to LTAFs, as a first step toward change with a broader consideration of FSCS coverage for non-standard assets to follow.
The FCA stated in PS23/7 that following the consultation, if it decided to exclude LTAFs from FSCS coverage, it would consult on detailed rules later in 2023. The consultation closed on 10 August.
In light of the feedback received, the FCA confirms in FS23/7 that it has decided not to take forward the proposal to exclude FSCS cover for regulated activities relating to LTAFs at this time. It now proposes to consider any changes to the scope of FSCS protection for retail investments in the round, rather than excluding activities relating to certain investment products in isolation.